Should your company be filing foreign patent applications?
Inovia, the foreign patent filing platform, conducted a survey of 150 U.S. companies to assess the impact of the U.S. economy on global IP strategy. Their US IP Trends Report is an in-depth look at the foreign filing strategies of U.S. patent owners. The survey found U.S. patentees have become more selective and judicious about their global patent filing strategy. While 45% of respondents filed more than half of their patent applications overseas, they filed in an average of only 6 countries.
SME’s filing a single patent family to multinationals filing more than 1000 patent families are represented in the survey, from the following industries:
- 01% – Business/finance
- 14% – Chemicals/materials
- 19% – Electrical/electronics
- 08% – IT/software/media
- 19% – Mechanical/engineering
- 23% – Pharmaceuticals/biotech
- 16% – University/association/non-profit
A majority of the respondents cited “cost containment” and/or “USPTO reform” as the most important strategic topic for the IP industry.
Overall, the mood of the respondents was mixed. Some cited improvements in their company, industry, or ability to file as many or more patent applications at the same or lower cost than previous years. Respondents attributed these positives to workflow changes, vendor negotiations, and creative IP budget management techniques.
Concerned about private company financial reporting? FASB wants to hear from you
FASB has asked for representatives from private companies to speak at public roundtables on “issues relating to existing private company accounting and reporting standards.” The request was issued at the end of last week.
The first such Roundtable is on October 11 in Chicago, and the second is October 17 in San Francisco. FASB Chairman Leslie Seidman says the purpose of these meetings is to talk about “private company accounting and reporting issues on existing GAAP with a wide variety of stakeholders.”
Seidman adds that two similar roundtables held last fall:
were valuable forums for hearing first hand from private company constituents about their concerns with existing GAAP. Those roundtables provided the impetus for our efforts to develop a differential reporting framework for private companies and our project to simplify goodwill impairment assessments.
Topics to be addressed at FASB’s October roundtables, according to the board, “are expected to include, but will not be limited to:”
- variable interest entities
- interest rate swaps, and
- level 3 fair value measurements
Private company owners, preparers, auditors, users of private company financial statements, and others interested in participating in FASB’s October roundtables need to complete this online application form by September 13.
Average deal termination fees at 3.5%
The just-released 2010 Transactions Termination Fee Study by Houlihan Lokey (HLHZ)—which summarizes key metrics for 2008-2010 M&A transactions—shows termination fees as a percentage of transaction value ranged from 0.9% to 30.4% in 2010, with a mean of 3.5% and a median of 3.3%–slightly higher than the mean in 2008.
“Properly crafted, a termination fee provision can facilitate the sale of a company by ensuring that the bidder will receive a material ‘consolation prize’ to defray its investment—in time, out-of-pocket expense and opportunity cost—if the transaction is not consummated,” the report says. “On the other hand, termination fees protect the acquirer by effectively increasing the price that a third-party bidder will need to pay to consummate a competing transaction.”
Researching acquisitions? Pitchbook reaches 50,000 deal milestone
PitchBook has alerted businessvaluation.com that it’s pushed its deal count beyond 50,000 domestic and international transactions (representing over $6.24 trillion of invested capital) in the PE and VC universe. These transactions—plus data on deal sizes, transaction multiples, investors, sellers, lenders, service providers, company financials and more—are available on the Pitchbook platform.
Over 41,000 companies, 14,000 investors, 14,000 funds, 158,000 people, 6,000 service providers and 5,000 limited partners involved in private equity and venture capital are included in the database.
Contact Lexie Gross at BVR about the Pitchbook platform, or for information about the Pitchbook/BVR Guideline Public Company Comps Tool.
Search the financial statements and deal documents of over 20,000 M&A deals with one click
Subscribers to Pratt’s Stats and Public Stats have long been able to search private sold businesses and public sales without commingling the summary results: but now, with recent changes to the system, users can toggle back and forth between the two databases with one click. For instance, if you’re looking for information for a company in the top seven industry subdivisions covered in Pratt’s Stats and Public Stats (business services, eating places, miscellaneous retail, personal services, depository institutions, chemical and allied products or measuring devices), you’ll be amazed at the number of results. You can also search by any criteria—keyword, revenue range, industry name, SIC code, profitability margins, company name (and more)—and instantly get:
- Financial details on close to 20,000 closed business sales
- 65-88 data points for every deal, including 13 financial ratios and 6 valuation multiples
- Easy toggling between private and public targets
- Complete income statements and balance sheets
- Details on selling terms and non-compete agreements
- Explanatory notes when available
- Direct link to original source documents, for easy retrieval and verification of SEC filings (for all deals in Public Stats and SEC-sourced deals in Pratt’s Stats)
For more information click here; or contact a BVR sales team member at info@bvresources.com or 503-291-7963, ext. 125.
Ten reasons why brand valuation is important to business owners–and how to increase your value
“The corporate brand is probably the least understood asset in most companies, yet it can be one of the greatest tools to building corporate value,” says James Gregory (CoreBrand) in his article, “Ten Reasons Brand Valuation Matters for Boards.” Valuation practitioners can use his “Top 10” list to educate business owners on the potential value of their corporate brand, which can:
- Legitimize investment
- Provide an objective measure of effort
- Create accountability
- Align leadership
- Identify growth opportunities
- Predict market shifts
- Identify competitive opportunity and advantage
- Inform M&A or strategic alliances
- Create licensing opportunities, and
- Help define the value of other intangibles.
Fine-tune your intangible value analysis: On September 20th Mary Adams (I-Capital Advisors) will lead the BVR webinar “Analysis of the Intangible Drivers of Company Value.” In this 75-minute program, Adams will cover what every business valuation analyst needs to know in our increasingly knowledge-based economy.
Concerned about private company financial statements? So is FASB!
The FEI Financial Reporting Blog just reported FASB’s preliminary findings on potential improvements to standard setting for private companies. “The FAF has thus far received over 1,100 comment letters on this subject,” says Edith Orenstein (Financial Executives International). While a large portion of the comment letters agree to the Blue Ribbon Panel’s recommendation to form a new standards-setting board for private companies, others “give that the users of private company financial statements do not have the same needs as users of public company financial statements (such as analysts), are not supportive of the wholesale creation of a new standards board for private companies, preferring instead other approaches, including formation of a new advisory group to FASB regarding private company accounting,” Orenstein remarks.
FASB published the preliminary staff findings in FASB in Focus: Private Companies: The Path to a Differential Standard-Setting Framework.
The best entrepreneurial ideas are often the simplest
You don’t hear a lot about people increasing value in the grocery store world, at not least since Whole Foods made it’s move toward market dominance. But here’s an example of beating a leader at their own game and building a niche. Thanks to The Daily Good (dailygood@goodinc.com) for this great description of In.gredients’ business idea:
In.gredients promises to be the country’s first ever ”package-free, zero waste grocery store.”
The idea is so simple, it’s surprising that no one in the United States has implemented it yet. (The United Kingdom…got the bulk food-only Unpackaged in London last year). Shoppers at In.gredients will be encouraged to bring their own containers to pack up items like grains, oils, and dairy. If shoppers don’t have their own containers, the store will provide compostable ones. It’s as if the specialty bulk food section rebelled and took over the rest of a traditional grocery store. In.gredients will replace unhealthy, overpackaged junk with local, organic, and natural foods, and moonlight as a community center.
“Truth be told, what’s normal in the grocery business isn’t healthy for consumers or the environment,” In.gredients co-founder Christian Lane said in a press release. Americans add 570 million pounds of food packaging to their landfills each day, while pre-packaged foods force consumers to buy more than they need, stuffing their bellies and their trash bins: 27 percent of food brought into U.S. kitchens ends up getting tossed out.
Two great tools to do industry research–in retail grocery or other markets–are the BVR/Pitchbook Guideline Public Company Comp Tool, or BizMiner, which includes competitive market analysis data as well.
Improving your risk analysis
Samuel Weaver recommends taking advantage of more of the risk analysis tools available to financial analysts and senior management…even if they’re simply little-used functions in Excel.
For instance, while speaking to a room of over 200 NACVA members today in San Diego, Weaver asked how many routinely use senstitivity analysis in their DCF’s. About 15% of the room raised their hands, even though the simple function under data and then “What If Analysis” and then “Tables” in Excel 2007 can “do this in five minutes.”
“Data tables can quickly be created on any cell—COGS, NPV, growth rate,” says Weaver. They give you a range. It’s a model like Monte Carlo analyses which creates a range of solutions that looks like a roulette wheel if displayed graphically (“They didn’t want to call this method the ‘Atlantic City’ analysis, even though they also have roulette wheels,” joked Weaver.)
You can enhance sensitivity analysis on things like cost of capital by adding probability per cents to ranges of most likely assumptions. “You won’t do well in court if you go in and say ‘the value is between negative $8 million and $20 million,” Weaver says. “But, this range of outcomes may be very helpful to owners trying to make business decisions.” Illustrating the range and likelihood of outcomes can steer senior management as they assess outcomes—and particularly risks.
“Crystal Ball, @ RISK, and other tools can really help add value for your clients,” Weaver said, talking about tools he uses.
Need to find EBITDA multiples for your business?
The Invested Life, MSNBC’s website for small business owners (and those who want to start a business, recommends Pratt’s Stats as the best place to start in their new post “How to Sell a Business.” Pratt’s Stats is a database created by Business Valuation Resources that relies on actual private company financial statements and deal documents, rather than averages–or IRS or bank filings that are often slanted to meet the needs of those institutions.
The new post also recommends some obvious and essential keys to selling your business:
1. Come up with a tax strategy, hopefully long before selling
2. Use multiple methods to advertise your business widely
3. Don’t rely on generic deal documents–they”ll miss the key value nuances and often leave you exposed.
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